Motor fuel prices—gasoline, to the ordinary folk—have risen to a headline-making level. Many people who mock those with doubts about the current President’s birth status are willing believers in some shadowy conspiracy by oil speculators. Scapegoating speculators is an indication of ignorance.
The short version is that speculation may be able to rise prices for a short time. But it cannot keep prices up. That’s because the method speculators use is futures contracts, which are paper agreements to deliver some physical commodity on a given date at a given price.
Speculators can’t take physical delivery. Even if they have the money, there’s nowhere to put the oil. Our storage tanks are full. Which is a product of past speculation; people bought oil and held it thinking the price would rise. It did, and that led to more oil being delivered than was consumed.
That’s the law of supply and demand at work. When prices are rising, it inspires greater supply and reduces demand. And fills the oil storage tanks.